Profile: Eastman Chemical Company (EMN)

Eastman Chemical Company (Eastman), incorporated on December 31, 1993, is a global chemical company, which manufactures and sells a portfolio of chemicals, plastics, and fibers. Eastman has 11 manufacturing sites in seven countries that supply chemicals, plastics, and fibers products to customers throughout the world. The Company’s products and operations are managed and reported in five operating segments: the Coatings, Adhesives, Specialty Polymers, and Inks (CASPI) segment, the Fibers segment, the Performance Chemicals and Intermediates (PCI) segment, the Performance Polymers segment and the Specialty Plastics (SP) segment.

Coatings, Adhesives, Specialty Polymers, and Inks Segment

In the CASPI segment, the Company manufactures liquid vehicles, additives, specialty polymers, and other raw materials, which are integral to the production of paints and coatings, inks, adhesives, and other formulated products. The CASPI segment focuses on producing raw materials rather than finished products. During the year ended December 31, 2008, the CASPI segment accounted for 23 % of Eastman’s total sales. The additives product lines consist of products, including cellulose-based specialty polymers. Coalescents include products, such as Texanol ester alcohol, which improves film formation and durability in architectural latex paints, and chlorinated polyolefins, which promote the adherence of paints and coatings to plastic substrates. Solvents, which consist of ester, ketone, glycol ether, and alcohol solvents, are used in both paints and inks to maintain the formulation in liquid form for ease of application. The adhesives product lines consist of hydrocarbon resins, rosin resins, resin dispersions, and polymers.

The Company competes with Dow Chemical Company, BASF SE, and Exxon Mobil Corporation.

Fibers Segment

In the Fibers segment, Eastman manufactures and sells Estron acetate tow and Estrobond triacetin plasticizers for use primarily in the manufacture of cigarette filters; Estron natural and Chromspun solution-dyed acetate yarns for use in apparel, home furnishings and industrial fabrics, and cellulose acetate flake and acetyl raw materials for other acetate fiber producers. The Fibers segment’s manufacturing operations are primarily located at the Kingsport, Tennessee site, and also include a smaller acetate tow production plant in Workington, England. During 2008, the Fibers segment accounted for 15% of Eastman’s total sales.

Eastman manufactures acetate tow under the Estron trademark according to a variety of customer specifications, primarily for use in the manufacture of cigarette filters. The Company manufactures acetate filament yarn under the Estron and Chromspun trademarks in a variety of specifications. The Fibers segment’s acetyl chemical products are sold primarily to other acetate fiber producers and include cellulose diacetate flake, acetylation-grade acetic acid, and acetic anhydride. The Fibers segment also markets acetyl-based triacetin plasticizers under the Estrobond trademark, generally for use by cigarette manufacturers as a bonding agent in cigarette filters.

The Company competes with Celanese Corporation, Rhodia S.A., and Daicel Chemical Industries Ltd, SK, Mitsubishi Rayon Co., Ltd., Industrias del Acetato de Celulosa S.A., UAB Korelita and Novaceta SpA.

Performance Chemicals and Intermediates Segment

The Company’s PCI segment manufactures products that are sold externally, as well as used internally by other segments. During 2008, the PCI segment accounted for 32% of Eastman’s total sales. The PCI segment offers over 135 products that include intermediates based on oxo and acetyl chemistries, and performance chemicals. The PCI segment also manufactures performance chemicals, complex organic molecules, such as diketene derivatives, specialty ketones, and specialty anhydrides for pharmaceutical, fiber, and food and beverage ingredients, which are typically used in specialty market applications.

The Company competes with Dow Chemical Company, Celanese Corporation, BASF and Exxon Mobil Corporation.

Performance Polymers Segment

During 2008, the Performance Polymers segment accounted for 16% of the Company’s total sales. The segment is comprised primarily of the Company’ PET product lines, and also includes various polymer intermediates. PET is used in beverage and food packaging and other applications, such as personal care and cosmetics packaging, health care and pharmaceutical uses, household products, carpet fibers, and industrial packaging applications.

The Company competes with DAK Americas LLC, Indorama Group, Invista, Mossi & Ghisolfi Group, Nan Ya Plastics Corporation, and Wellman Inc.

Specialty Plastics Segment

In the SP segment, the Company produces and markets specialized copolyesters and cellulosic plastics that possess differentiated performance properties for end uses. During 2008, the Company accounted for 14% of Eastman’s total sales. The SP segment consists of two primary product lines, specialty copolyesters and cellulosics. The SP segment’s specialty copolyesters are produced in Kingsport, Tennessee; Columbia, South Carolina, and Kuantan, Malaysia. The cellulosic products are produced in Kingsport, Tennessee. Eastman’s specialty copolyesters are based on Eastman’s production of cyclohexane dimethanol (CHDM) modified polymers. Cellulosics and cellulosic plastics product line includes Tenite acetate, Tenite butyrate, and Tenite propionate flake and polymers, as well as a family of colored products for each line.

The Company competes with SK Chemical Industries, Bayer AG, Saudi Basic Industries Corporation, Dow Chemical Company, Evonvik Industries, Acetati SpA and Daicel.